Economics Pre-assessment

1. Economics Pre-assessment Let’s see what you already know about Economics!

2. What is Economics? Taught by Professor Coleman

3. In this chapter, we’ll discuss . . . • Scarcity and the Factors of Production • Opportunity Cost • Production Possibilities Curves

4. Scarcity and theFactors of Production What comes to mind wheny you hear the word scarce? Brainstorm a list of items that you think might be scarce. Bellringer

5. Key Terms: Define • Need • Want • Economics • Goods • Services • Scarcity • Shortage • Factors of production • Land • Labor • Capital • Physical capital • Human capital • Entrepreneur

6. Scarcity and Choice • People can’t have everything they need and want • Economics—study of how people seek to satisfy both by making choices

7. Why must people make such choices? The reason is . . .

8. Scarcity • Scarcity implies limited quantities of resources to meet unlimited wants. • Economics is about solving the scarcity problem • Not the same as shortage • Occurs when producers will not or cannot offer goods/services at the current prices

9. Can Time Be Considered a Resource? Is it scarce? • Create a chart that shows how, in a typical weekday, you allocate the 24 hours available to you.

10. Factors of Production

12. Which Scarce Resources were used to produce the fruits and vegetables below?

13. Section 1 Assessment • Record questions 1 through 6 on page 6 of your textbook. • Submit your responses upon entering class tomorrow.

14. Opportunity Cost Bellringer Choose 1.

15. Key Terms Matching Activity • Trade-off • Guns or butter • Opportunity cost • Thinking at the margin • The most desirable alternative given up as the result of a decision • An alternative that we sacrifice when we make a decision • Deciding whether to do or use one additional unit of some resource • A phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods

16. Trade-Offs . . . • Individuals and Trade-offs • Businesses and Trade-offs • Society and Trade-offs

17. What are some trade-offs of buying a car?

18. Defining Opportunity Cost • The most desirable alternative given up as the result of a decision is called the opportunity cost. • Whatever you are willing to sacrifice • Using a Decision-Making Grid, Figure 1-2, pg. 10 • What benefits will Karen forgo if she chooses to sleep later?

19. Thinking at the Margin • Deciding whether to do or use one additional unit of some resource OR • Deciding how much or how less to do

20. Thinking at the Margin At what point is this person paying an added cost with little extra benefit?

21. Section 2 Assessment • Record and answer questions 1-4 on page 11 • Submit your responses upon entry tomorrow

22. Production Possibilities Curves Define Key Terms Explain why graphs sometimes show information more clearly than text or tables. Production possibilities curve Production possibilities frontier Efficiency Underutilization Cost Law of increasing costs Bellringer

23. Production Possibilities • Shows alternative ways to use an economy’s productive resources • Textbook pages 14-15 • What is the opportunity cost of the decision in Graph A? • What is the opportunity cost of choosing to produce the combination of goods shown at point c instead of that shown at point d?

24. Efficiency . . . • Efficiency—using resources to maximize production or output of goods and services • Represented by drawing a point inside the production possibilities frontier • Underutilization—using fewer resources than the economy is capable of using • Represented by any point inside the line (possibilities curve)

25. Growth . . . • When an economy grows, the entire production possibilities curve “shifts to the right” • Immigrants pour in . . . Working • New inventions • When production capacity decreases, the curve “shifts to the left” • Country loses land in a war • Population ages, becomes less healthy or less educated (human capital decreases)

26. and Cost. • The alternative we give up when we choose one option over the other • View “The Law of Increasing Costs Explained” on YouTube • See Figure 1.7, page 17. What is the cost of increasing watermelon production?

27. Section 3 Assessment • Record and Answer questions 1 through 3 on page 18. • Submit upon entry tomorrow.

28. Chapter 1 Exam • Visit: PHSchool.com • Enter Web Code: mna-1011 • Take Chapter 1 Self-Test • Raise your hand upon completion so I may record your grade.